Revealed: IRS and State Department conspired in targeting pro-Israel group

The IRS scandal has just gained another dimension, and it is more than a "smidgen." Emails uncovered by the House Ways and Means Committee show that the State Department was involved in the IRS’s attempt to deny tax-exempt status to Z-Street, the pro-Israel organization founded and run by AT contributor Lori Lowenthal Marcus, based on Z-Street’s pro-Israel positions that conflicted with Obama administration policy. This is known as “viewpoint discrimination,” and is strictly illegal.The Wall Street Journal explains what has been uncovered:

…emails uncovered by the House Ways and Means Committee show that the IRS and State Department were conferring in 2009 about pro-Israel groups like Z Street and considering arguments to deny their tax-exempt applications.

In an April 16, 2009 email, Treasury attache to the U.S. Embassy in Jerusalem Katherine Bauer sent IRS and Treasury colleagues a 1997 JTA News article sent to her by State Department foreign service officer Breeann McCusker. The subject was whether 501(c) groups buying land in Israel's disputed territories were engaged in "possible violations of U.S. tax laws." The article chronicles the controversy and whether "ideological activity" can "legally be financed with the help of U.S. [tax] dollars."

"Thought you might find the below article of interest—looks like we've been down this road before," Ms. Bauer wrote. "Although I believe you've said you can't speak to on-going investigations, I thought it was worth flagging the 1997 investigation mentioned below for you if it can be of any use internally when looking for precedence [sic] for the current cases." A Treasury spokesman declined comment on Ms. Bauer's behalf.

The "current cases" would have been applications like Z Street's in which Israel-related activity was apparently being scrutinized for its ideological and policy content. The government says Z Street got special scrutiny because it was focused in a region with a higher risk of terrorism, which is hard to believe and in any case doesn't explain all of the IRS's behavior.

It doesn't cover, for instance, why one questionnaire we've seen from the IRS to another Jewish group applying for tax-exempt status asked, "Does your organization support the existence of the land of Israel?" and "Describe your organization's religious belief system toward the land of Israel." No matter the answers, they should not affect the processing of an application for 501(c) status. The State-IRS emails reveal a political motivation for IRS scrutiny that gives Z Street powerful evidence for its suit charging IRS bias.

Another thing that the emails demonstrate is that bureaucratic bungling within the IRS can’t be a believable excuse. This is now a scandal that involves a conspiracy between different departments of the federal government, strongly implying a coordinating effort senior to the Departments of State and Treasury. Which would be…the White House.

This is so incriminating that a full court press is being invoked to delay further discovery. The lawsuit filed by Z-Street in 2010 is the furthest along of any judicial inquiries into the IRS scandals. And the IRS is doing everything possible to slow it down:

On Monday the IRS filed an appeal of the judge's decision denying its motion to dismiss Z Street's case. The government says the action stops all discovery while the appeal is pending, a process that could take months or even years. By filing the appeal on the last possible day, the Justice Department is running out the clock on discovery during the remainder of the Administration.

This is a whole lot of effort to prevent discovery in a case that is not even seeking damages.

Of course, the damages the IRS and its bosses are worried about don’t concern money. We the taxpayers are on the hook for that. The real damage comes from public knowledge of the extent of the politicization of the IRS and other government departments working together to suppress political opposition to the administration. That was among the articles of impeachment for Richard Nixon that Hillary Clinton helped draft. If the media were not so blatantly biased and treated Obama the way they treated Nixon, this current revelation would be screaming from the nightly news and the front pages of today's newspapers.

The IRS scandal has just gained another dimension, and it is more than a "smidgen." Emails uncovered by the House Ways and Means Committee show that the State Department was involved in the IRS’s attempt to deny tax-exempt status to Z-Street, the pro-Israel organization founded and run by AT contributor Lori Lowenthal Marcus, based on Z-Street’s pro-Israel positions that conflicted with Obama administration policy. This is known as “viewpoint discrimination,” and is strictly illegal.

…emails uncovered by the House Ways and Means Committee show that the IRS and State Department were conferring in 2009 about pro-Israel groups like Z Street and considering arguments to deny their tax-exempt applications.

In an April 16, 2009 email, Treasury attache to the U.S. Embassy in Jerusalem Katherine Bauer sent IRS and Treasury colleagues a 1997 JTA News article sent to her by State Department foreign service officer Breeann McCusker. The subject was whether 501(c) groups buying land in Israel's disputed territories were engaged in "possible violations of U.S. tax laws." The article chronicles the controversy and whether "ideological activity" can "legally be financed with the help of U.S. [tax] dollars."

"Thought you might find the below article of interest—looks like we've been down this road before," Ms. Bauer wrote. "Although I believe you've said you can't speak to on-going investigations, I thought it was worth flagging the 1997 investigation mentioned below for you if it can be of any use internally when looking for precedence [sic] for the current cases." A Treasury spokesman declined comment on Ms. Bauer's behalf.

The "current cases" would have been applications like Z Street's in which Israel-related activity was apparently being scrutinized for its ideological and policy content. The government says Z Street got special scrutiny because it was focused in a region with a higher risk of terrorism, which is hard to believe and in any case doesn't explain all of the IRS's behavior.

It doesn't cover, for instance, why one questionnaire we've seen from the IRS to another Jewish group applying for tax-exempt status asked, "Does your organization support the existence of the land of Israel?" and "Describe your organization's religious belief system toward the land of Israel." No matter the answers, they should not affect the processing of an application for 501(c) status. The State-IRS emails reveal a political motivation for IRS scrutiny that gives Z Street powerful evidence for its suit charging IRS bias.

Another thing that the emails demonstrate is that bureaucratic bungling within the IRS can’t be a believable excuse. This is now a scandal that involves a conspiracy between different departments of the federal government, strongly implying a coordinating effort senior to the Departments of State and Treasury. Which would be…the White House.

This is so incriminating that a full court press is being invoked to delay further discovery. The lawsuit filed by Z-Street in 2010 is the furthest along of any judicial inquiries into the IRS scandals. And the IRS is doing everything possible to slow it down:

On Monday the IRS filed an appeal of the judge's decision denying its motion to dismiss Z Street's case. The government says the action stops all discovery while the appeal is pending, a process that could take months or even years. By filing the appeal on the last possible day, the Justice Department is running out the clock on discovery during the remainder of the Administration.

This is a whole lot of effort to prevent discovery in a case that is not even seeking damages.

Of course, the damages the IRS and its bosses are worried about don’t concern money. We the taxpayers are on the hook for that. The real damage comes from public knowledge of the extent of the politicization of the IRS and other government departments working together to suppress political opposition to the administration. That was among the articles of impeachment for Richard Nixon that Hillary Clinton helped draft. If the media were not so blatantly biased and treated Obama the way they treated Nixon, this current revelation would be screaming from the nightly news and the front pages of today's newspapers.